Over the past two decades, a loss of older, thick ice has created new channels. Before 2018 there were virtually no bulk carriers or gas tankers in the Polar Code area, but the Yamal Gas project and the Mary River Mine in Nunavut have contributed to a swell in activity. Chinese President Xi stated in a visit to Moscow in 2023 that stronger diplomatic relations with Russia were vital to counteract, “a long campaign by the United States to hobble China’s ascent.”

Paving the road to a nuclear revival are small modular reactors (SMRs). These reactors are approximately a third of the size of a typical plant and are prefabricated, thus reducing the capital costs that larger plants contend with. Oracle recently announced plans to power a new data center with three SMRs. To date, there are only three SMRs operational in the world. Constellation is in talks to build an SMR at one of its facilities, but most experts agree that SMRs won’t reach a commercial stage until the next decade. Last year an SMR project in Idaho was canceled as the project’s costs skyrocketed from $5 billion to $9 billion due to high interest rates and inflation.

The broader oil and gas industry has shifted in recent years, focusing on profitability over growth. CEO compensation plans previously encouraged production above all else, but the market is a fluid creature. Production of a good that the world needs requires more of a trader’s mindset if the ultimate objective is to keep costs in check and return cash to shareholders.

California Governor Gavin Newsom ran for reelection in 2022 with an expressed vow to wage war on Big Oil. Needless to say, Chevron and others were concerned, but Newsom was just the latest in a long line of California politicians who have made the state an uncomfortable fit for oil and gas.

Ørsted is the largest energy company in Denmark and develops and operates a host of renewable energy projects. Few companies have felt the Charybdis delay snafu more than Ørsted after having chartered Charybdis for two wind farms off the coast of New York that required alternative and costly plans for both. Two other projects off the coast of New Jersey were also delayed. The demand for offshore wind farms continues to grow, but vessels remain scant.

While increased US clean hydrogen production is a safe bet, permitting issues, access to capital, and equipment costs are looming bottlenecks. Approximately $7 billion in grants is being disbursed by the Biden Administration as part of the 2021 infrastructure law aimed at jumpstarting clean hydrogen production. The administration’s climate goals are highly contingent on making the cost of clean hydrogen production closely competitive with hydrogen made from natural gas. Yet, investors are wary of structural impediments. Recipients of the $7 billion in grants will be energy infrastructure companies, hydrogen suppliers, industrial buyers, and state and local partners.

In the face of a long and drawn-out conflict in the Middle East and Ukraine, US oil production has reached record highs. As of early October, total Stateside petroleum production registered 13.2 million barrels a day. Based on data from the Energy Information Administration this is the highest figure since 1983. Active US drilling rigs number 501 nationwide and output for 2024 is expected to drop just slightly to 13.12 million barrels a day. Active rigs are down significantly (610 in 2022), however, making output even more impressive considering the erratic US regulatory environment.

In 1998 Exxon made history with its acquisition of Mobil Corp. The deal was worth an unprecedented $75.3 billion resulting in the formation of the largest global energy company in the world. Nearly 25 years later ExxonMobil (Exxon) is at it again, this time closing a $60 billion deal with the US shale giant, Pioneer Natural Resources. There are few firms capable of multi-billion-dollar mammoth moves. In 1998 the larger oil and gas industry was suffering from depleted prices. Margins were lean and the bigger players came to believe that mergers were the only way to survive.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies are tightening the crude oil supply. This follows OPEC’s 2022 strategy and will likely continue through the fourth quarter of 2023. The US sectors most heavily affected are farmers, construction companies, and transportation businesses. The benchmark Brent crude price surpassed $90 a barrel for the first time in September while 1.3 million of estimated barrels have been cut daily. Crude prices are at a 10-month high and the heavy refined fuels that ships, planes, and trucks rely upon have skyrocketed in price. Diesel is up 41% while jet fuel registered a 24% increase (year over year).

Many of the world’s largest economies are betting on batteries. While the challenges become clearer by the day, if batteries will bolster the move toward a reliable alternative energy source, lithium is critical. Up until recently the largest lithium reserves were relatively known, but a recent discovery of an ancient supervolcano in Nevada just might be the world’s largest lithium deposit to date. Chile is currently home to the world’s largest lithium reserves and the South American country is the world’s second-largest producer. Australia follows with Argentina, China, and the US rounding out the top five. This new discovery will potentially nudge the US up the list and radically alter the supply landscape.

As the pandemic waned the Permian Basin (of West Texas and New Mexico) turned into a growth engine for US shale. Small, private drillers cleaned up but it would appear their most propitious spots are now tapped out. Many drillers are shedding rigs while their larger counterparts are sitting patiently on greater inventories of undrilled wells. US crude production is likely to remain tepid for the remainder of 2023. Moving forward some estimates point to fewer than 300,000 barrels a day in 2024 compared to this year. Company break-evens have increased by $5 to $10 due to the rising cost of materials with steel pipes in particular up approximately 40% compared to 18 months ago.

In 2016 US universities were churning out just over 7,500 earth science and geology degrees. Those figures held relatively steady until 2019 when graduates slipped to roughly 7,300. By 2020 they were under 7,000 and in 2021 there were approximately 5,800. Degree preference swings are not rare. Some degrees go in and out of favor while new areas of discipline are constantly entering the marketplace. But this trend with earth science and geology degrees has the mining sector’s attention. Mining depends on an influx of fresh minds and youth like most industries.

Global demand for lithium is on the rise. Rechargeable batteries are driving growth, and with the highest electrochemical potential of all metals, lithium is an ideal power source. Lithium is extracted from minerals in igneous rocks, clay minerals, and from naturally-enriched continental brines hosted within salars. The latter is the preferred lithium source for investors as the prospecting, exploration, and development of a project are favorable on numerous fronts (cost, logistical, and environmental).

Navigating away from fossil fuel dependence places a greater demand on rare earth magnets. Congress has introduced a bill offering a tax credit for US rare earth magnet production. This would result in the construction of a local supply chain in an attempt to wean a reliance on China. Terbium, neodymium, and dysprosium are just a handful of rare earths needed to help fuel offshore wind turbines, electric vehicles, and are also useful in robotics. A report from Wood Mackenzie’s Rare Earths Market Service pegs the demand for rare earth oxides to grow from 171,300 metric tons currently to 238,700 tons by 2030.

The Inflation Reduction Act has companies scrambling to take advantage of tax credits. Solar and wind projects are earmarked as are new initiatives for batteries and green hydrogen that fuel the electric grid. Incentives matter, but money is finite which is giving rise to some interesting discourse as to what truly qualifies as green energy. The most talked about issue surrounds green hydrogen. Also known as “clean hydrogen,” machines called electrolyzers that run on electricity and are produced from a renewable source are vital inputs. Electrolyzers split water into hydrogen and oxygen. Yet, they consume an inordinate amount of energy to make a very small amount of hydrogen.

The mining sector is under a microscope. But this is nothing new. The sector powers much of the world, yet there have always been labor and environmental concerns attached to their work. It’s the nature of the business, but in 2023, in addition to mining, the auto industry is making its way under the same watchful lens. You can chalk this up to lithium and similar minerals that go into the fabrication of batteries. Lithium is a hot commodity. As electric vehicles (EVs) continue to develop, batteries will need more and more of the “white gold” to keep up with demand. The country with the largest reserves is Chile, while Australia, Argentina, and China round out the top 4.

On a June summer day, back in 2019, the Philadelphia Energy Solutions refinery suffered a disastrous event. Explosions rocked the refinery sending vessel fragments careening 2,000 feet across the Schuylkill River. The fire was ignited by a vapor cloud caused by the release of hydrofluoric acid and hydrocarbons in the alkylation unit of the refinery. Responsible for the refinement of roughly 30% to 35% of diesel for a large chunk of the east coast, the ultimate loss of the refinery left an indelible mark on the diesel supply crunch that we’re facing today.

The renewable energy push continues. Despite the setbacks the invasion of Ukraine has presented, the world’s major powers are not reassessing their ultimate goal of a completely renewable future at some point. While this might sound fanciful to some, one thing that is rarely discussed is what mineral resources are required to advance this push. Cobalt, antimony, nickel, silver, lithium, and tungsten are just a handful of minerals used in renewable energy projects. The wind powers the windmill, but the windmill and its components are made up of mined minerals. While the previously mentioned minerals are critical, there is one that trumps them all – copper.

The seas are alive with coal. Shipping lines have been crisscrossing the oceans with so much coal lately that major ports in the Netherlands, Belgium, and others are having to commandeer iron storage space just to accommodate the influx. Once again the Russian invasion of Ukraine is upending traditional trade. What is now known as the “wartime coal trade” is following a similar trajectory as the “wartime oil trade.” In 2019 CNN famously reported that China would stop funding overseas coal projects. Headlines of “Coal is Dying” were commonplace. The activist group 350.org piled on with tweets such as, “Coal is dead. Power to the people!” Fast forward to the present and China’s coal production over the first half of this year rose by 10%.

The Chilean mining industry is losing competitiveness. Average copper grades are sinking faster than the world average, putting significant pressure on productivity and increasing miners' demand for scarce water and energy. Although the South American powerhouse produces a host of minerals, copper is often considered the nation's cash cow and is essential to the economy: red metal exports were worth some US$38 billion in 2014, 50% of total exports and equivalent to roughly 15% of GDP, even considering weakening copper prices.